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Volume 2018 - Number 26

July 12, 2018

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Securitization Market Produces Modest Bump in New Issuance in 2Q18 as Residential MBS Hits Refi Skid

MBS and ABS issuers were busy in the second quarter of 2018, generating $435.64 billion in new securities, according to a new analysis by Inside MBS & ABS. [Includes three data charts.]

Industry Continues to Look for Ways to Fix the VA IRRRL ‘Orphan’ Loan Mess

The mortgage industry this week continued to look for a fix to the VA Interest Rate Reduction Refinance Loan mess, which has imperiled roughly $500 million worth of government product that is now ineligible for Ginnie Mae securitization.

Ginnie Mae’s Suppression of Rapid Loan Refis Closes Prepayment Gap between Ginnie, Conventional MBS

Ginnie Mae’s crackdown on certain issuers over loan churning – coupled with a backup in primary mortgage rates – has narrowed the prepayment speed gap between conventional and Ginnie-backed collateral, according to industry analysts.

Conventional MBS Trading Volume Slipped in June, But Non-Agency Sales Hit a High for the Year

The average daily trading volume in agency MBS fell to $223.2 billion in June, a slight decline from the month prior, according to figures compiled by the Securities Industry and Financial Markets Association.

Moody’s Says Expanded QM Standard is Credit Negative For Nonprime RMBS, but Industry Expert Disagrees

The easing of qualified-mortgage standards under the Dodd-Frank reform bill could be credit negative for nonprime residential MBS backed by loans originated by nonbanks, Moody’s Investors Service said. But an industry expert disagrees.

Fitch Warns of Differences in ‘Full’ Representations and Warranties from Various Issuers of Non-Agency MBS

Non-agency MBS investors might not be aware of the differences in representations and warranties provided by issuers of new non-agency MBS, according to Fitch Ratings. In a recent report, the rating service noted that issuers are diverging from standard practices in terms of “full” rep-and-warrant frameworks.

Fed Incorporates Changes Called for by Securitization Industry in Rule on Single-Counterparty Credit Limits

A final rule from the Federal Reserve regarding single-counterparty credit limits looks a lot better to the securitization industry than the proposed rule. Industry participants had warned that the rule proposed in March 2016 was overly broad, complex and unworkable.

RBS Agrees to Settle Illinois’ MBS Claims; PwC Ordered to Pay FDIC; Ambac Loses MBS Fight in NY

The Royal Bank of Scotland last week announced a multi-million dollar settlement with the state of Illinois to resolve the bank’s alleged misconduct in its marketing and sale of risky MBS leading up to the 2008 financial crisis.

MBS and ABS Issuance at a Glance: July 13, 2018

A full page of issuance data and MBS market indicators.


With mortgage production down noticeably this year from 2017, how many lenders might disappear via M&A or failure during the next 12 months?

10% or less. It’s not that bad out there.
11% to 25%. It’s a challenging market.
25% to 40%. It’s going to be very ugly.
No opinion.

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